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Personal loan: The 10 most important questions and answers for borrowers

Dubious loan providers

Personal loan: The 10 most important questions and answers for borrowers

The following questions and answers give a rough overview of the personal loan as well as current legal regulations:

Dubious loan providers

1. How much can my credit be?

Many loan applicants set the desired amount utopian. However, the lender may only grant the loan if the applicant's solvency is assessed in such a way that he is able to repay the loan within 36 months.

2. Can I apply for a loan without income?

You can apply for it, but it will not be granted. There is a minimum income of CHF 2,500, and you must be in a regular employment relationship. Providing guarantors is also not sufficient, but you cannot get a loan without your own income.

3. How high can the rates be?

The personal loan installments must be set at a level that takes account of monthly expenses and is set accordingly. They may not be chosen too high in favor of a shorter term because this increases the risk of late payment, which in turn would result in an entry in the ZEK and worsen your credit rating.

4.May fees be charged for a loan brokerage?

No. To protect consumers, the law does not allow fees for advisory and agency services. Any costs incurred are already included in the total interest costs, the interest must be calculated accordingly.

5.Can a loan contract be terminated prematurely?

You can redeem the personal loan at any time without giving a reason. Prepayment fees are not payable. You will receive a final invoice from the lender, interest will not be charged for the installments that are no longer payable. You only pay as much interest as has been accrued in the past.

6. How can you recognize reputable providers?

Each credit intermediary may only work if he has a license from his canton for his work. These licenses can be requested from the canton administration. Reputable providers also do not charge fees for their activities or make promises that the loan would be granted without a credit check. Will an? Instant loan? offered, it means to also keep your hands off it.

7. What if the credit is too high?

It may happen that the bank grants too much credit because it has insufficiently checked the applicant's creditworthiness. If it can be demonstrated that the provider has neglected his obligations, the credit contract can be declared void. As a customer, you are entitled to the entire loan amount including interest and costs. Important: The bank also calculates the attachable part of the income in the portability calculation!

8. What is the maximum interest rate currently?

The legislator has set the maximum interest rate to be charged at 10 percent. In part, installment loans are also available directly from the sellers for twelve percent. A personal loan, however, must not exceed 10 percent.

9. Do I have to sign a loan agreement?

If you have received an offer and this has resulted in a loan agreement, you do not have to sign it yet. You are not obliged to do so! Even after signing, you have a 14-day right of withdrawal, so loans are only paid on the 15th day after signing.

10. Help, my contract has formal errors! What now?

The legislator has specified exactly which points must be included in a loan agreement. For example, the annual interest rate or the reference to the right of withdrawal are important points. If these are not included, you as the customer have the right to the loan amount over the agreed term, but you do not have to pay any interest.

You are welcome to view the offers here in credit comparison use and discover more information on the subject of personal loans!

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I need money to finance my studies. How do I get a personal loan

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I need money to finance my studies. How do I get a personal loan?

Students often stand there with empty pockets because they concentrate on their studies and don't do a job on the side. If they earn the money through part-time jobs, their studies often drag on. A dilemma that seems to be solved with a personal loan. But can a student get a personal loan at all?

Dubious loan providers

No credit without income

If you don't have any income yourself, you might get the idea that someone could vouch for him. But this is not possible, because no reputable provider grants a loan to people who do not have their own income. This is also not possible with a guarantor! The personal loan stipulates that it must be repaid on its own, which is also the reason for the extensive checks by the bank prior to approval. As part of the credit check, your own income is carefully examined and included in the assessment.

With a personal loan, the following conditions regarding income are required:

    • the applicant is in an employment contract that has not been terminated
    • the minimum income is 2,500 Swiss francs a month
    • the minimum income required also depends on the amount of credit required

Pending or completed debt enforcement and the regularity of payments are also checked.

This is how the study financing can work

As a rule, students cannot get a loan. If you cannot fund your studies in any other way, you should therefore look for alternatives. This means that you may ask within the family, friends or acquaintances for a loan that can be designed according to your financial means. 

Important: Always keep any agreements in writing, because what's the name of it? ?Money ruins friendship!? This also applies within the family, where disputes have often arisen because the money lent has not been repaid. The most important conditions such as the amount of the loan, the repayment modalities and the time of repayment should be laid down in a contract signed by both parties.

However, there are other alternatives to traditional personal loans. A scholarship is eligible for significantly more students than is generally accepted. A student loan is also often possible, although no specific statements can be made about the modalities here. These depend on the canton in which you study and on the institution itself. The conditions differ in this regard. However, the university is a good contact for financing your studies and usually offers its own advisory services.

Crowdlending may be an option for private investors, and donations can also be collected on various platforms. However, the course must then really be worthy of support. apply and be described accordingly!

Conclusion on personal loans for students

At this point you have the option of a personal loan through a Credit comparison avail to take. But a personal loan will not work for students as long as they do not have their own income. In addition to an impeccable credit rating, this is the most important prerequisite for such a loan to be granted at all, and the minimum income must be 2,500 Swiss francs, which for most students should be far from reality.

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My loan application was rejected. I am now blocked for further loan applications

My loan application was rejected

My loan application was rejected. Am I now blocked for further loan applications?

Even if your own considerations were so extensive, it can still happen that the loan application is rejected. This results in poor creditworthiness. But are you automatically blocked for further loan applications and will you never be able to get a conventional loan again?

My loan application was rejected

Collection of data at ZEK

It is correct that the data is recorded at the central office for credit information. This means that not only has the presence of a loan application been registered, but it has also been noted whether the loan was rejected or approved.

Payment arrears for bills, other loans or debt collection can also be found there, giving a comprehensive overview of a person's creditworthiness. The data are not all saved for the same duration. If the loan application was rejected, the corresponding entry remains in the database for two years.

What happens when I apply for a new loan?

It is open to everyone to apply for a new loan even after one has already been rejected. The entries in the ZEK are now decisive for whether the application is approved or rejected or whether the conditions are adjusted accordingly. Depending on the reason for the rejection and the type of risk awareness of the bank concerned, the further course of action is different.

If a loan application was rejected because credit card debt enforcement or dunning procedures were already pending, the loan application is usually not approved. If the first loan application was rejected because of less difficult matters, it may well be that the new application is approved.
In principle, however, any entry in the ZEK can have the following effects, among others:

    • bad credit rating
    • the possible rejection of the loan application
    • if the application is approved, a higher interest rate
    • Limitation to a lower loan amount possible if approved

It is therefore important to always make a realistic loan application and to know your own credit rating or to assess it correctly. This will avoid disappointment after the application has been made, and will also prevent you from receiving another entry in the register, which can also have a negative impact on all financial projects for the next two years.

It can be helpful not to send a loan request directly to the bank, but rather to first commission an independent advisor to do so. He can assess the creditworthiness and weigh up various options for the further procedure.

After the rejection, you should contact the ZEK and obtain a free self-assessment. This means that in future you will know which entries are available about you and what has led to the loan application being rejected. Please never switch to providers who allegedly grant loans without a credit check, here you fall into the trap of fraudsters!

In summary: After the rejection, not everything is lost

Before applying for a loan, find out about your creditworthiness in order to know which entries are available. If a loan application is rejected, it depends on the respective reasons whether another application can be successful. The entries in the ZEK for rejected loan applications remain for two years.

Would you like to compare the conditions for the personal loan in advance? Here, in ours loan comparison you have the opportunity to do so!

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Personal loan: Every third Swiss already had a personal loan

Personal loans

Financing Fast Spending: Personal Loans As A Way To The Debt Trap?

A personal loan should help to bridge a financial bottleneck and is quite manageable with a maximum repayment period of 36 months. He has a bad reputation, according to many Swiss people, that the personal loan would lead directly into the debt trap. Nevertheless, many Swiss have already taken out such a loan.

Personal loans

Help or trap?

Surveys in 2017 had shown that every third Swiss had already taken out a personal loan. Nonetheless, two thirds of the Swiss believe that taking out a personal loan is the first step towards a debt trap and only leads to thoughtless consumption. In addition, many banks are assumed to simply rip off the borrowers and not to provide real help in a financial emergency.

Bridging a financial bottleneck is at the forefront of personal loans. For example, if a new car is to be bought, many Swiss people use a personal loan. At least around 50 percent said in surveys that they had already financed a vehicle with a personal loan. 

However, one in five also stated that they had used a personal loan to settle debts or open bills. Here the fear of the debt trap may certainly be real, because if other debts are paid off when the debt is raised, a worst-case scenario can lead to a vicious cycle that has only one end: total over-indebtedness.

However, anyone who takes out a personal loan, for example to finance the purchase of new furniture or a new vehicle, does not restrict their own reserves or the monthly financial scope by purchasing these goods too much and can still fulfill a wish.

This is what my borrower thinks about personal loans

People who have already taken out a personal loan are generally more open and positive about this financing option than people who only know the loan in theory. You have fulfilled a wish, repaid the loan and everything is fine. They believe that personal loans are a real help. Every second person who had already taken out and repaid a loan stated in the survey that they were using a personal loan again.
Personal loans are most commonly used to finance the following goods and products:

    • Initial and continuing education
    • vehicle financing
    • Furniture
    • Purchase of electronic devices
    • Travel and vacation

However, it also shows that personal credit is rarely used for the latter three points. Furniture and electronic devices in particular are often financed directly by the dealer through installment payments. It is also noticeable that it is mainly men who take out a loan to finance certain wishes, women tend to use the savings or plan more long-term and save on large purchases.

Conclusion: Personal loans are suitable for financing large purchases

Even if popular opinion says that a personal loan would quickly lead to a debt trap, borrowers don't see it that way. Of these, one in two would take out a personal loan again, because the experience with it is so positive. 

A personal loan does not automatically lead to debt, so it is a good way to bridge a financial bottleneck. 

It is important that you have the personal loan in advance Check credit comparison, because the offers for this vary depending on the bank.

Source: comparis.ch

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Personal loan: choose the right loan term

Consumer Credit Act

Personal loan: choose the right loan term

In most cases, anyone interested in a loan assumes that the term should be as short as possible. It is assumed that this could save costs because the interest would be calculated for a shorter term. However, there are cases in which a short term is even a problem.

Consumer Credit Act

Save by repayment

The popular opinion about loans and optimal terms can easily be summarized: The shorter the term, the cheaper the loan has to be. But that's a mistake! At least in some cases, a runtime that is too short can be problematic rather than helpful. But: If you tend to have a longer repayment period when concluding the loan contract, you can still redeem your loan earlier. 

The interest that would have accrued for the remaining term then expires. The consumer credit law stipulates that it must be possible to repay the loan before it expires, but this procedure must not make the loan more expensive. The outstanding loan interest that would have accrued for the entire term then expires. The point is that lawmakers want to ensure that borrowers don't face any obstacles if they want to pay off their debts earlier.

Paid too late? Beware of default interest!

When applying for a loan, it is checked whether the applicant will be able to repay his loan within 36 months. This is intended to provide some protection against over-indebtedness. Important: The term of the loan should always be calculated so that it can be repaid without any problems. For this purpose, a budget is drawn up that includes all income and expenses as well as a buffer. Two variants are possible:

    • The term is chosen longer than necessary
      In the course of repaying the loan, the borrower notices that he has additional financial resources or that his monthly financial scope is greater than expected. He can redeem the loan prematurely, the interest that is still due for the payment months that are now no longer applicable.
    • The term is too short
      There is sometimes a problem here: the borrower cannot meet his payment obligations. With a short loan term, the monthly burden of principal and interest payments increases. If these cannot be mastered, there will be delays in payment and thus due interest will be due.

Default interest makes a loan more expensive and is also registered with the central office for credit information. In turn, the creditworthiness of the person concerned deteriorates sustainably and future borrowing can also be problematic or very expensive.

In summary: good planning of the loan term is important

Please plan a sufficiently large buffer in addition to the regular expenses when planning the possible loan. What if the car breaks down or needs renovation? Such expenses are often forgotten in the monthly planning. In any case, prevent default interest from being incurred; in agreement with the lending bank, the loan agreement may be changed again and the term may be extended. However, this also carries the risk of a higher interest rate.

Here you can see the offers for a personal loan in loan comparison use and find out if this loan option suits you!

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Consumer Credit Act: An overview of the most important things

Consumer Credit Act

Does the Consumer Credit Act protect against over-indebtedness?

The consumer credit law is designed to protect consumers from possible over-indebtedness. It also protects banks and credit institutions from possible default on their borrowers. Important: The consumer credit law (KKG) regulates the commercial granting of loans!

Consumer Credit Act

Then the consumer credit law applies

The consumer credit law applies to different types of contracts, all of which are subject to the same conditions:

    • for private use only
    • Loan amounts between 500 and 80,000 Swiss francs
    • Loan term for more than three months
    • Credit with no collateral deposited

The consumer credit law includes, for example, personal or consumer loans, credit cards, overdrafts and many other types of loans. But even if the KKG does not apply, certain laws apply. The right of withdrawal may cease and the borrower may not decide against the loan within the next 14 days after the loan has been approved.

The aim of the consumer credit law is to define rights and obligations and thus keep risks and payment defaults as low as possible. It includes the following points:

    • Advertising bans for so-called instant loans and other aggressive offers

The credit industry has defined what aggressive promotions are. These include instant loans that are said to be paid out within a few minutes. You are not serious!

    • Mandatory examination of the applicant's creditworthiness and creditworthiness

The borrower must be able to repay a loan within 36 months, but must also be able to meet his minimum living requirements. In order to obtain the relevant information, the central office for credit information or one of the various credit bureaus is interviewed.

    • Compliance with the maximum interest rate

The maximum interest rates are currently capped at 10 percent by law.

    • Regulations for early repayment of the loan

Consumer loans may be repaid before the credit expires. Interest for the unused credit period will then be waived.

    • Cancellation rights of borrowers

Borrowers have the right to change their minds. The loan is therefore only paid out on the 15th day after the positive decision in order to preserve the 14-day right of withdrawal.

    • Lenders' reporting requirements for approved loans

Every credit has to be reported! The information point for consumer credit must include the borrower's personal details, the number of installments, the start and end of the contract, repayment rates and any late payments.

Conclusion: The consumer credit law protects consumers and banks

The consumer credit law is intended to protect both consumers from over-indebtedness and banks from payment defaults. Various data must be obtained from the bank so that a loan can be legally granted. However, if the credit does not fall under the definition of the consumer credit law, other laws apply. This can include, for example, that the cancellation period does not apply and that once a loan has been committed, it must also be repaid as agreed.

You are planning to take out a loan and want to compare the personal loan offers and for that a loan comparison use?

Source: comparis.ch

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How does the credit rating affect my loan application

How does the credit rating affect my loan application

How does the credit rating affect my loan application?

As a rule, creditworthiness is only associated with the granting of loans. It also plays a role in online payments! Banks only decide whether a loan application is approved or rejected after the credit rating has been checked.

How does the credit rating affect my loan application

Wrong assumption: bad payment behavior has no consequences

Bad payment behavior will never be without consequences, that much is clear. It can be assumed that around half of all Swiss people believe that a warning can be paid and that there are no further consequences. But far from it! It is rather the case that a delay in payment is registered directly and has an impact on the overall creditworthiness. Of course, such entries have a particularly negative effect when it comes to granting loans. These are rejected or only approved in a low amount if poor payment behavior has been certified.

The following two terms are used to assess creditworthiness:

    • credit rating
      The creditworthiness provides information about whether the customer can pay. If his current budget allows all income and expenses that are compared to the fact that the remaining amount can be used to repay a loan, this should be assessed positively. The possible loan amount is also based on this. Important: In order for the creditworthiness to be checked in the first place, the applicant must have a freely disposable income, be of legal age and be able to repay the loan in 36 months.
    • credit-worthiness
      Here the probability is calculated whether the customer will repay the loan. It is about its trustworthiness when it comes to payments, using open liabilities and even debt enforcement that has already been completed. In addition, age, nationality, place of residence and the frequency of changing jobs also play a role. Banks get the necessary data from creditworthiness databases, debt enforcement offices and the central office for credit information.

Intrum Justitia, Bisnode, CRIF and Creditreform are the major credit bureaus in Switzerland, but they are not only asked for information when granting loans. Inquiries are also made here when it comes to online orders and payment in installments or by invoice. Even the wish for a new cell phone contract is registered here! The creditworthiness is also negatively influenced by slow payments, it does not even have to be reminded. Such a rating is intended to protect the borrower from over-indebtedness. At the same time, the bank naturally wants to protect itself and protect it from default.

How creditworthiness influences lending

In summary, it can be stated that the creditworthiness is significantly involved in the decision on a loan. Credit approval or refusal depend on it, with all banks applying different rules for assessing the applicant's creditworthiness. 

They also do not allow themselves to be looked into the cards and do not publish such regulations. Tip: Before you make a loan application, it makes sense to get an overview of your own creditworthiness so that no rejected loan application further deteriorates the creditworthiness.

If you have one Compare personal loan you can do it here without applying for a loan!

Source: comparis.ch

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Personal loan savings potential: Why a redemption can be worthwhile

Personal loan savings potential: Why a redemption can be worthwhile

Personal loan savings potential: Why a redemption can be worthwhile

The interest due on personal loans is currently at an all-time low. Interest rates are currently just 4.5 percent, provided that they have a corresponding credit rating. For borrowers, this means that paying off their existing loan can be worthwhile.

Personal loan savings potential: Why a redemption can be worthwhile

Switching providers is worthwhile

A precise comparison of the conditions is not only worthwhile when you take out a new loan. At the moment, interest rates are so low that it can also make sense to compare an existing loan with other offers and that it is worth changing the loan provider. If a new loan agreement can be concluded at lower interest rates, it is worthwhile in any case, especially with outstanding loan amounts and with longer terms.

The consumer credit law offers the opportunity to change providers, because it is said here that personal loans can be redeemed at any time and without giving specific reasons. No additional fees may apply. The scheme allows loans to be redeemed early and transferred to another lender. The savings potential is large and depends primarily on the interest rate and the remaining credit amount.

It makes sense to check beforehand

Please do not prematurely replace and change providers, but subject your project to a thorough examination. In some cases, the providers lure with very low interest rates, but only offer so-called shop window prices. This means that when you take a closer look, the interest rates are significantly higher. Independent consultants can assess whether it is just a tempting offer or whether the offer is realistic and serious.

Also remember the entry at the central office for credit information. Credit applications are reported and registered there, rejected loan applications are saved for two years and can be viewed by all banks. For this reason too, the previous comparison is important! It is best to do the following:

    • Define the remaining loan amount and the term of the existing loan as well as the current interest rate to be paid.
    • Find various offers from reputable credit institutions that are suitable for you.
    • Consult an independent advisor or try to compare yourself. What would be the interest you would have to pay for the loan amount that is currently to be repaid?
    • If the evaluation is positive: approach the new bank and submit a loan application.

You no longer have to worry about repaying the old loan, as a rule the new bank will take care of that. It cancels the existing loan and replaces the previous bank. With the loan amount that you receive from the new bank, the existing loan is replaced in one fell swoop. Then you pay the agreed installments to the new bank.

Conclusion on the loan repayment

Replacing the loan can make sense if the existing loan turns out to be too expensive and there are offers with significantly lower interest rates. An independent advisor can help you with a comparison and let you know whether it is worth repaying the old loan. Again, you can have one Use credit comparison and decide whether a change makes sense.

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Personal loan: 5 tips for borrowing

Personal loan: 5 tips for borrowing

Personal loan: 5 tips for borrowing

With a personal loan, short-term payment bottlenecks can be bridged and purchases made in the range of 500 to 80,000 Swiss francs. The personal loan, also known as a small or consumer loan, should not be taken up prematurely. The following tips also help you keep your finances under control.

Personal loan: 5 tips for borrowing

1. Determine creditworthiness yourself

First of all, it is advisable to find out about a possible loan amount. On the one hand, a budget is drawn up for this, in which all income and expenditure are included. A buffer for unforeseen expenses should also be included. The amount that remains at the end can be used for a loan or for repayment.

In the process, you should also find out about your own creditworthiness. Have you already submitted a loan application that has been rejected? Then this rejection will be saved for around two years at the central office for credit information, where all lenders can view it. The credit rating determines the amount of the loan, if it is granted at all, and the interest rate. The worse the credit rating, the higher the interest rate will be.

2. Pay attention to serious offers

Unfortunately, the financial market is full of dubious offers that appear lucrative at first glance. The instant loan that is paid out in a few minutes? Sounds good, but it's not. It is a fraud, and by the way, even advertising for such an instant loan is prohibited by law.

Dubious providers often advertise with low interest rates and high amounts of credit, with a settlement without a credit check and with the fact that they can accelerate lending if an advance payment is made. Serious providers do not make such promises!

3. Don't finance short-lived products with credit

Important rule of thumb: The term of the loan should in any case be shorter than the life of the product financed with it. It is therefore not recommended to finance a vacation with a personal loan, for example, because here you are already caught up in everyday life if you still have to pay off the loan installments. Cars, renovations or new furnishings are more suitable for personal loan financing.

4. Keep an eye on costs

Of course, the personal loan is not in vain and costs fees that the borrower demands in the form of interest. The lower the borrower's credit rating, the higher the interest rate. A maximum of 10 percent is possible as an interest rate, here the legislator has capped the interest rate.

5. Better bet on personal loans

The personal loan has several advantages over other forms of credit. On the one hand, the aforementioned maximum interest applies. On the other hand, financed goods and products belong directly to the buyer, while, for example, in the case of a purchase in installments, the goods remain the property of the seller until full payment. The personal loan protects the borrower against over-indebtedness because it is only granted after a thorough credit check. If the creditworthiness is negatively assessed, a reputable lender decides against lending.

Would you like to compare the conditions for a personal loan? Then you are with our credit comparison precisely!

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Personal loan: An overview of the most important things

Personal loan: An overview of the most important things

Personal loan: An overview of the most important things

The personal loan is a good option if a financial bottleneck is to be bridged. Whether a renovation is planned, a new car is to be bought or whether the long-awaited vacation becomes more expensive than expected: With the personal loan, such wishes can be fulfilled flexibly.

Personal loan: An overview of the most important things

That says the consumer credit law on personal loans

The KKG (consumer credit law) also describes the personal loan as a small loan, which already says something about its definition. Because this is an interest-bearing loan that can be granted between 500 and 80,000 Swiss francs and has a term of at least three months. The personal loan is not secured by special collateral and may only be used for private purposes. As a result, companies cannot apply for a personal loan. There are two types of these small or consumer loans:

    • Offline loans
      The borrower applies for the loan in the bank branch.
    • Online loans
      The borrower uses an offer from a direct bank and takes out the loan online.

Many banks now offer both types of loans, and online loans are increasingly being processed through crowdlending.

The personal loan is suitable for this

The personal loan has advantages and disadvantages that must be assessed individually. It is important that the amount of the loan fits your own budget and the options for repayment. The personal loan is particularly suitable if you want to buy a long-lasting product, such as furniture or a new car. In addition, the loan is used to bridge a short-term payment bottleneck, which means that it must be clear that the repayment of the loan must be on a secure footing.

With a personal loan, interest costs can also be reduced if an existing loan is rescheduled. Furthermore, it is often used to finance training and further education that cannot be paid for otherwise.

However, the personal loan is not suitable in the following cases:

    • Acquisition of short-lived products
    • Investment in products if there is permanent poor solvency
    • Purchase of very expensive products and goods or for house building

A question of solvency

Particularly important: the granting of a personal loan depends on how good the credit applicant's credit rating is. This means that their solvency is checked and assessed so that they themselves are protected against the consequences of overindebtedness and so that the lender is also safe from default. The loan is only granted if the creditworthiness is rated as sufficiently good.

In order to be able to check the creditworthiness, the applicant not only submits his loan application, but also evidence of any risk factors. In addition, nationality and residence status, age and frequency of job changes are checked. Loans are only granted if the applicant is of legal age and has a regular income. Furthermore, the information from the creditworthiness databases is important. Open debt enforcement exclude the granting of a personal loan as a rule, completed debt enforcements at least reduce the creditworthiness.

The creditworthiness is also relevant for determining the interest rate: the poorer the creditworthiness, the higher the interest rate. Legally, the interest rate is capped at 10 percent. Certain risk factors therefore ensure that the interest rate becomes higher, even if the low interest rate phase is still raved about.

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